The Importance of Cell Phone Insurance

MISSION, KS--(Marketwire - Nov 15, 2012) - (Family Features) With so much of daily life connected to smart phones, the thought of being without one worries a lot of people. Unfortunately, loss, damage and theft do occur -- and more often than you might think.

According to the Federal Communications Commission, 1 in 3 robberies nationwide involve cell phones. And, according to mobile phone insurance company Asurion, 36.5 percent of customers filing claims cited loss or theft as the reason for filing a claim. This number jumps to an alarming 54 percent for iPhone customers. Asurion also reported that across all mobile phones, 53 percent of claims involved damage. Breaking out just iPhones, 42 percent of customers filing claims do so for damage.

Many people don't realize that replacing their lost, stolen or damaged phone will most likely cost more than what they paid up front. For example, an Asurion consumer survey showed that 43.5 percent of parents and 50.5 percent of students believe it costs less than $200 to replace a mobile phone. However, if your iPhone 4S or 5 is lost, stolen or damaged, you will be required to pay the full retail price of the mobile phone to replace it, not the discounted price you might have paid when signing up with the wireless provider or upgrading your phone. And that can be as much as $650.

Insurance vs. WarrantyThere are several protection options in the market. However, you need to understand the difference between insurance and warranties. The difference between insurance and a warranty is that a warranty covers hardware issues and accidental damage. You usually have to purchase a warranty at the time you buy the phone. Warranties, such as AppleCare, do not cover loss or theft of a phone.

Cell phone insurance is an insurance product, just like your home or auto insurance. It is regulated by insurance laws in each state. You pay a monthly fee for the insurance (typically between $5 and $7 for the basic insurance coverage). When you file a claim, you pay a deductible, typically $50 to $200, depending on the phone. With Asurion, for example, the iPhone deductible ranges from $169 to $199.

No one ever really wants to need insurance, because that usually means something unfortunate has happened. But, just like insurance for your home or car, if something does happen to your cell phone, you'll be glad to have a plan in place to quickly reconnect with family, friends and work.

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